There are strong indications that Deposit Money Banks may reduce lending to firms polluting the? environment.
The Bankers’ Committee is currently in partnership with the Central Bank of Nigeria to work out a framework that would assist DMBs to evaluate the environmental impact of firms’ activities before supporting them in the area of finance.
This was part of the highpoints of the Bankers’ Committee meeting held yesterday in Abuja.
Briefing journalists at the end of the meeting,? the Managing Director of Skye Bank Plc, Mr Kehinde Durosinmi-Etti, said: “On the sustainability, what banks are expected to do is help promote good governance and include ethical standards within the environment.
“That is companies that banks lend to should be able to work well with communities and a sense of adequate social responsibility especially with regards to pollution and environmental degradation. Any company that is polluting the environment, banks should not lend to it.
“So what we are trying to do is to make companies include their programmes when they are setting up and that way, they would work better with the communities.”
However, at the meeting, CBN denied investigating foreign exchange round-tripping by some Deposit Money Banks.
Its Director, Banking Supervision,? Mr. Joe Ajewole, who disclosed this, was in company of the Managing Director of Oceanic Bank Plc, Mr. John Aboh and the Managing Director of Mainstreet Bank, Mrs. Faith Tuedor-Mathews.
He said: “The allegation that some banks were being specially investigated for sharp malpractices was reviewed by the bankers’ committee and we want to say that nothing like special investigation of any number of banks with respect to FOREX malpractices.
“What is actually going on is the normal routine examination of banks and it is not targeted at a particular bank. For the ease of banking supervision, the CBN decided to organise the conduct of the examination into three streams and on completion of the first stream, we would move to the next stream.”
Other issues discussed at the meeting were the proposed cash limit policy, the sustainability of the banking sector and the recent increase in the Monetary Policy Rate.
On the MPR,? Ajewole said that the bankers’ committee unanimously endorsed the apex bank’s decision to raise the MPR by 275 basis points from 9.25 per cent to 12 per cent.
Explaining the need to endorse the hike, Aboh said: “You should understand that the key objective of any central bank in the world is price stability and exchange rate stability.
“What you do to achieve that varies. Now, what has happened is that interest rate has moved up, but a number of other things follow.